Kaguya Houraisan is a former lunarian princess from Touhou Project, who is loosely based on the japanese folktale of Kaguyahime. She first appeared as one of two final bosses of Imperishable Night, the other being Eirin Yagokoro.
Kaguya was exiled to earth over 1,000 years ago for consuming Eirin's hourai elixir, which made her immortal. During her exile, many men were impressed by her beauty and asked for her hand in marriage. Kaguya would test these men by agreeing to their marriage proposal if they were able to complete her Five Impossible Requests, which nobody was able to complete. These same trials led to a heated and bitter feud with Fujiwara no Mokou, who sought to seek revenge after her father failed to complete Kaguya's trials, ultimately leading to Mokou consuming the very same elixir that made Kaguya immortal.
In M.U.G.E.N, Kaguya has been created by HM, G-sho, Seravy and Yasai.
HM's version is reasonably good, but does not function at first, needing a slight modification to the end of the character's common1.cns file to run without crashing MUGEN. She is a very unusual character, with only about half of the defense of normal characters, and because of this, she is exceptionally fragile, with particularly heavy attacks being able to tear away enormous chunks of her health unless blocked or countered. She is also quite slow-moving and lacks long-range attacks, making constant attention very important when playing as them. Thankfully, their attacks deal high damage, and their supers/hypers are also exceptionally powerful.
Kaguya's most unique feature is that she enters a rage-mode of sorts under a certain amount of HP. In this state, she changes posture, and becomes noticeably less elegant, but much faster and capable of different supers/hypers capable of completely decimating opponents, taking off more than half of the enemy's life and being very difficult to avoid. However, as this state is temporary and only available when heavily damaged, the risk of losing becomes much higher when trying to exploit it, as letting your opponent beat Kaguya up can lead to the enemy pulling a quick victory with little chance for Kaguya to react.
Her AI is very strong, and can supposedly be configured in the character's Guya-AI.cns file, however, this feature is apparently unfinished, with a note by the creator mentioning that it will more than likely do nothing or potentially cause undesirable things.